Looking to move your company to Bulgaria? All you need to know

Bulgaria is becoming a popular choice for companies to relocate. The main reasons are a simple and enticing corporate tax system, lower labour costs when compared to other European countries, and the commitment of the government to implementing an attractive business scheme.

Are you interested in moving your company to Bulgaria? Here we will detail all you need to know about it.

Benefits of moving a company to Bulgaria

The main advantage of relocating a company to Bulgaria is the fact that the taxes are lower than in the rest of Europe and the whole system is rather simple. Bulgaria has a flat rate of 10% on company profit, payable every year by the end of June. 

Compared to other European countries, Bulgaria is imposing itself as a tax haven.

However, there are other benefits to moving a company to Bulgaria that are worth mentioning. 

–        Company registration in Bulgaria is simple and available to foreigners. The process is handled by a lawyer, and it takes just a few business days for a company to be established.

–        Labor costs are much lower in Bulgaria compared to its neighbouring countries. 

–        There are no running costs for companies in Bulgaria.

–        Bulgaria is a member of the European Union, NATO, and the Council of Europe.

–        The government is involved in promoting an advantageous business environment and attracting companies, even offering certain incentives.

–        The tax laws in Bulgaria are strong and will likely remain the same as all political parties are in favour of these laws and it would require the majority in parliament to ever change it.

Now let’s find out how to move a company to Bulgaria if you are a foreign business owner.

How to move your company to Bulgaria: required steps

Moving a company to Bulgaria is simple. 

Whether you are opening a new business or branching out from your corporation in your country, Bulgaria offers a simple and quick system to move your company to this country, made easier because Bulgaria has signed double taxation agreements with almost 70 countries around the world. 

Company registration in Bulgaria takes only 5 simple steps. From naming your company to registering it in the government official registry, the whole process may only take a few working days. 

Setting up a company in Bulgaria usually goes quickly and smoothly, including getting a VAT number, and in certain cases it can even be done remotely. In this case, the company registered in Bulgaria is considered a branch and it benefits from the double taxation agreements, paying taxes only on the income generated within the limits of Bulgaria.

A more direct approach would be to first become a tax payer in Bulgaria. In this case it would be necessary to get a residency in the country (for EU citizens it is a very simple process and all that is necessary is an address that can be a rental), open a bank account and then move onto registering a company. 

In these cases, the company registered can be seen as a subsidiary. With a lot more flexibility and independence, it’s considered a Bulgarian legal entity.

Low taxation regime for companies in Bulgaria

As we mentioned, Bulgaria has a single tax rate. This system, in place since 2007, has proven to be a huge part of companies considering moving to Bulgaria. And this is something the government wants. More companies, more work for locals, more business activities, and more taxes, it all boosts the economy and Bulgaria has managed to make it happen.

Companies are required to keep track of their business income and expenses, the latter can be deducted when filling out the compulsory yearly tax report. If you are not familiar with Bulgarian language, you can rely on a specialised accountant in Bulgaria, like Accountancy Bulgaria, which helps foreign business owners with all their accountancy activity since 1988.

Companies are required to simply pay 10% of the total net profit. 

The tax system in Bulgaria doesn’t require prepayments, meaning taxes are paid by the end of June of the following year (no need for tax returns). In the case of company profit being over EUR 150.000, companies must pay 80% of their estimated taxes by the 31^st of December. 

As you can see with this quick description, the taxation regime in Bulgaria is simple, there are no loopholes or complicated tax rules.

Easy company registration in Bulgaria

Anyone over the age of 18, regardless of their nationality, can consider to move a company to Bulgaria. The process is straightforward and, in most cases, will only take a few business days.

The registration process consists of just a few steps, it’s done all by a notary, and it can even be done remotely through power of attorney. 

Read also: How to check your bulgarian company registration: simple procedure

Types of companies in Bulgaria 

There are two kinds of companies that are the most popular options for company registration in Bulgaria. The already mentioned limited liability company (LTD) or a PLC (or joint stock company). The first one is the most common as it only requires one person to register it and it’s best suited for small businesses.

A PLC is a better option for bigger companies, it requires a board with at least 3 members, a director, and at least one shareholder. Additionally, this type of company requires an initial capital of EUR 25.000.

Conclusion

Moving a company to Bulgaria is easy, but even more, it comes with interesting advantages and benefits that expand the potential for profit of any company. If you need any help with bureaucracy and accountancy, consider of relying on accounting services in Bulgaria.